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2015 (2) TMI 620 - ITAT DELHIAssessment initiated u/s 153C - Held that:- Going through the satisfaction note recorded in the case of the appellant, in which reference to the various annexures which includes Balance Sheet, P & L Account and Audited Accounts of the appellant company has been made all these documents which partly belong to the appellant, are apparently reflecting it’s audited accounts based on which the returns of income have been filed by the appellant on earlier occasion. Thus there is nothing incriminating in these documents which can led to forming of the satisfaction on part of the AO to initiate proceedings u/s 153C of the IT Act. In the spirit of enactment of Section 153C it would be a implicit and inherent requirement that there must be existence of prima facie unrecorded/unaccounted transaction recorded in the documents belonging to the assessee before the said provision can be invoked in case of a third party, who has not been subjected to search u/s 132 of the IT Act. Any other interpretation any case the Audited Accounts/Balance Sheet/ P&L Account/acknowledgement of Return/copy of capital account of partners in appellant’s books cannot be such material which can be the basis of a valid and legal satisfaction as envisaged u/s 153C of the IT Act unless these are prima facie indicative of unaccounted/unrecorded transactions. Since there is no valid satisfaction u/s 153C in this case, therefore the assessment proceedings itself are liable to be quashed. See The Ld. AR, on the other hand [2014 (1) TMI 651 - ITAT DELHI ] - Decided in favour of assessee.
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